It is 5 AM in Lisbon, and I am sitting in an airport lounge with wifi, writing this week’s OTB on my iPad, clumsily. GaveKal has written a very candid analysis of the Catalonia vote/debacle, which was a hot topic at the conference where I was speaking – Spain is right next door. There were numerous past and current foreign ministers and other parliamentary leaders here, all very pro-EU, and they were aghast at Rajoy’s heavy-handed response.
Howewver, they all agreed that Catalonia could never be recognized as a new country in the EU, as this week’s OTB notes. Allowing Catalonian independence would fuel the flames of the numerous separatist movements all over Europe and disintegrate the movement to a closer EU – something that all here agreed would be a bad thing. Remember, Catalonia is much bigger than Greece – it’s 20% of the Spanish economy and Spain’s strongest region. Not a small deal. But I think the outcome will be a deal like the Basques got – more independence, and they get to keep more of their tax revenue. But the referendum was a great negotiating tactic. And Rajoy, with his clumsy police action, actually gave the separatists the upper hand.
I may at some point write a full letter on what I heard at this confernce. There were some very different viewpoints than you hear in the US (even from my close friend George Friedman). When you spend a great deal of time with Jean-Claude Trichet, former president of the ECB (who was extraordinarily polite and gracious) and hear him advocate for a stronger European NATO, and hear as well from far-left German Politician Joschka Fischer, who also espoused a hard line against Russia and China and a stronger NATO – almost sounding like Trump – you wonder what rabbit hole you have fallen down. Herr Minister Fischer was however not amused when I pointed out the similarity between his views and Trump’s. He swears he has no interest in ever being a politician again. But his talk, which I oddly found myself agreeing with much of, certainly sounded like a stump speech. My new friend may have protested his reluctance too vigorously. Oddly, the greatest disagreement I stumbled into was with a fellow American who is a friend of Hillary. Which made for a couple very lively dinner debates – which I hoped amused our hosts.
This post was published at Mauldin Economics on OCTOBER 4, 2017.